Market appraisal

The biggest names in the Middle East drilling business reveal how 2009 has rolled out, and their expectations for 2010.

Drilling activity in the Middle East has dropped from the 2007-2008 peak. However, the big challenge for drilling technology and service providers has been downward cost pressure by the oil companies. To stay ahead, it seems that whether you are a downhole tool provider, a service company, or anything in between, delivering and packaging your goods into an integrated offering has been the dominant trend affecting your business in 2009.

This month the Oil & Gas Middle East special report brings you the biggest names in the regional drilling business. Exclusive insights from the dominant oilfield service companies, leading technology providers, safety experts and international tool and bit manufacturers, this is the definitive market review for the Middle East.

Weatherford Drilling Review

Brod Sutcliffe, Global Business Development Director for Drilling Services at Weatherford says Middle East activity has been strong, outperforming other markets. "Demand for drilling solutions in this region has been prominent. The Middle East and North Africa had a very strong year and this performance helped offset some of the weaker performing areas like North America."

Though no particular hotspots of activity have dominated the company's regional performance, Sutcliffe says the typical markets have performed largely as usual. "I think that changing oil prices have necessitated a review of activities and contracting strategies amongst the NOC and IOC companies across the region, but our rig count remains high across the region, with declines in one area offset by dramatic increases in others."

The period of low oil prices which characterised the first quarter of this year may have been a major contributor in a shift in attitudes towards upstream strategies by the region's biggest players, he says.

"Services that Weatherford provides than can reduce overall cost have proven particularly popular this year. Project management, single-source solutions which reduces headcount and subsequently reduces cost has been in strong demand. Coupling this with technology changers in managed pressure drilling, performance drilling, reservoir characterization, revitalized well construction designs and generally a better understanding of the formations is also seeing significant pick up throughout the region," explains Sutcliffe.

For oil companies, improving cost-control abilities has become the dominant trend in 2009. Sutcliffe says this is largely in-line with previous years, but with renewed focus in the Middle East this year.

"The most significant trending we've noticed is the shift towards single sourcing of integrated drilling and workover capability."

The biggest gains in the drilling business will be made by better understanding the characteristics of the reservoir and understanding the difference between value and cost when considering a drilling and ultimate level of field recovery.

"To enable this, the combined application of motorized rotary steerable performance drilling systems, BHA vibration management tools and managed pressure drilling to drill at balance will allow operators to maximise the on-bottom ROP, maximize BHA reliability and reduce drilling risk and associated flat time," he says.

Weatherford has positioned itself as an integrated solution provider across the whole drilling spectrum of services and is focused on bringing that approach to the Middle East says Sutcliffe.

"We provide almost everything for drilling and workover services. Being a single-source provider means less contractors for the oil companies, with better communication, improved efficiency,  more effective knowledge management and overall cost-savings." Upbeat about the business climate as 2009 begins to draw to a close; Sutcliffe says he expects the Weatherford drilling services and solutions divisions to see continuous double figure growth in 2010.

Earlier this year Weatherford scooped a major performance-based evergreen contract for integrated service provision for the Amal and other fields in the south of Oman.

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